Although much of the current debate among Europe's policymakers seems to regard debt relief as the ultimate taboo, the move for a government to cancel their citizens' liabilities, or for a sovereign to be forgiven by its creditors, is not nearly as unprecedented as we might think.

The practice of debt forgiveness can be traced all the way back to the Old Testament.

In Jewish Mosaic Law, every seventh Sabbath year saw the wiping away of all debts, where creditors cancelled all the obligations of their fellow Israelites.

Every 49th year (seven Sabbath years) was the 'Year of the Jubilee' when freedom from all debt and servitude was proclaimed throughout the land.

Unlike modern notions of debtor distress, where default is seen as the result of profligacy or misfortune on the part of the borrower, Judeo-Christian traditions rested on the principle that both creditors and debtors had a duty towards God.

In the New Testament, the Lord’s Prayer calls upon the disciples to ask God to “forgive us our debts, as we also have forgiven our debtors."

Loans were less a way to make money than they were a means to help one's fellow man. Given that all worldly wealth and property belonged ultimately to God, a creditors' rights over it were temporary rather than absolute.

Smashing tablets in Babylon

One of the most famous proclamations of the virtue of debt repudiation comes from ancient Babylon (modern-day Iraq).

In 1792BC, the self-proclaimed King Hammurabi of Babylon forgave all citizens’ debts owed to the government, high-ranking officials, and dignitaries.

The Code of Hammurabi, which currently sits in the Louvre in Paris, declared:

If any one owe a debt for a loan, and a storm prostrates the grain, or the harvest fail, or the grain does not growth for lack of water, in that year he need not give his creditor any grain, he washes his debt-tablet in water and pays no rent for this year.

Hammourabi’s jubilees were part of a long line of debt cancellations that can be traced back to Mesopotamia as long ago as 2400BC.

Historians have counted around thirty episodes of general debt cancellations from 2400 to 1400 BC, noting they were occasions of great festivity which often involved the physical destruction of the tablets on which liabilities were recorded.

Rescuing Europe from the Great Depression

Europe emerged from the conflict of the First World War debt-addled and in a depression.

By the mid-1930s, many countries had begun abandoning the Gold Standard in a bid to reflate their economies without the burden an anachronistic exchange-rate system.

As part of this process, most of Europe's governments had a significant portion of their liabilities written-off for good.

For the likes of France and Greece, the jubilees were closer to 50pc and 40pc of GDP respectively.

Full repayment was so rare, that Finland was the sole European sovereign who managed to honour all its post-war obligations.

Germany's post-war economic miracle

Only 16pc of polled Germans currentlythink Greece should be the recipient of some form of debt cancellation from the eurozone. The irony of Berlin's obstinancy on debt relief may well be lost on some.

Following the end of WWII, the London Debt Agreement of 1953 saw the abolition of all of Germany's external debt. The total forgiveness amounted to around 280pc of GDP from 1947-53, according to historian Albrecht Ritschl.

The cancellation, along with an extension of its repayment schedule, allowed Germany to return to the financial markets, and become part of the IMF and World Bank.

The London agreement also helped set in motion the country's incredible export performance as Germany was required to service its debt through money earned from foreign trade.

In the words of historian Ursula Rombeck-Jaschinski, Germany's "economic miracle would have been impossible without the debt agreement."

Whither Greece's debt mountain?

Greece's new government is pushing for a debt conference on the lines of that which saved Germany from its post-war abyss. At more than €300bn, the Syriza-led coalition wants a nearly half of its debt pile to be permanently wiped off. So far, the country's Troika of creditors are not playing ball.

Whatever happens in this latest game of brinkmanship between creditors and debtors, history shows that mass debt write-offs are neither as rare nor as taboo as we might think.